/raid1/www/Hosts/bankrupt/CAR

/raid1/www/Hosts/bankrupt/CAR_Public/000605.MBX C L A S S A C T I O N R E P O R T E R Monday, June 5, 2000, Vol. 2, No. 108 Headlines ALBERT: $300 Mil Lawsuit over Untreated Pine Shakes Thrown out AUTO INSURANCE: Insurance Customers Sue CCC Information over Valuation BP AMOCO: Discloses Chem-Lab Risks and Fends off Would-Be Lawsuit COMMERCIAL FINANCIAL: Bankruptcy Ct Considers Pay to Laid Off Workers CONDOR TECHNOLOGY: Allegations in MD over Y2K Dismissed within Months CYBER-CARE, INC: Gilman and Pastor Files Securities Suit in Florida GTE CORPORATION: Milberg Weiss Files Securities Lawsuit in NY GUN MAKERS: PA Joins Communities Dropping Suits Against Smith & Wesson HOLOCAUST VICTIMS: Talks Fail to Resolve Legal Wrangle; Resumes June 12 INMATES LITIGATION: WI Has Authority to Send Inmates out, Ap Ct Rules KAISER ALUMINIUM: Faces a Number of Asbestos-related Lawsuits KAISER ALUMINIUM: Plaintiffs Want Gramercy Explosion Suits in LA State MATTEL INC: Emerges from Stockholder Suit over Old Learning Merger MATTEL INC: Stockholders File Suits in CA and DE over Mismanagement MATTEL INC: Stockholders Sue upon Announcement of Earnings Shortfall PHONE FIRMS: Off the Hook on Chicago Telecom. Tax Suit Seeking Refund POTASH CORP: 8th Cir Reverses Antitrust Claims in Conscious Parallelism SECRET SERVICE: Black Agents Claim Retaliation for Racism Lawsuit TOBACCO LITIGATION: Judge Warns against Dawdle; Fed Suit Moves Forward W.R. GRACE: Agrees to Settle MD Plant Workplace Sexual Harassment Suit ********* ALBERT: $300 Mil Lawsuit over Untreated Pine Shakes Thrown out -------------------------------------------------------------- An Edmonton judge has thrown out a $300-million class-action lawsuit against the Alberta government over its approval of untreated pine shakes. Justice Mel Binder of Court of Queen's Bench dismissed the lawsuit saying it cannot proceed as a class action. The Alberta Pine Shake Homeowners Association had gone after the province over thousands of cases of rotting roof shakes, claiming it knew the roofing material was faulty, but approved it anyway. (The Toronto Star, June 2, 2000) AUTO INSURANCE: Insurance Customers Sue CCC Information over Valuation ---------------------------------------------------------------------- On January 31, 2000, a putative class action lawsuit was filed against CCC Information Services Group Inc., Dairyland Insurance Co., and Sentry Insurance Company. Susanna Cook v. Dairyland Ins. Co., Sentry Ins. and CCC Information Services, Inc., No. 2000 L-1 (Circuit Court of Johnson County, Illinois). Plaintiff alleges that her insurance company, using the Company's TOTAL LOSS product, offered an inadequate amount for her automobile. Plaintiff seeks to represent a nationwide class of all insurance customers who, during the period from January 28, 1989 up to the date of trial, had their total loss claims settled using a valuation report prepared by CCC. The complaint also seeks certification of a defendant class consisting of all insurance companies who used the Company's valuation reports to determine the "actual cash value" of totaled vehicles. Plaintiff asserts various common law and contract claims against the defendant insurance companies, and various common law claims against CCC. Plaintiff seeks an unspecified amount of compensatory and punitive damages, as well as an award of attorneys' fees and costs. The above action follows the filing of several other putative class actions, which name only CCC and individual insurance companies. Those actions, each of which was filed by the same plaintiffs' attorney in the Circuit Court of Cook County, Illinois, are captioned as follows: * Alvarez-Flores V. American Financial Group, Inc., Atlanta Casualty Co., And Ccc Information Services, Inc., No. 99 Ch 15032 (Filed 10/19/99); Gibson V. Orion Auto, Guaranty National Ins. Co. And Ccc Information Services, Inc., No. 99 Ch 15082 (Filed 10/20/99); * Keiller V. Farmers Insurance Group Of Companies, Farmers Group, Inc., Farmers Insurance Exchange, Farmers Insurance Co. Of Oregon, And Ccc Information Services, Inc., No. 99 Ch 15485 (Filed 10/27/99); * Stephens V. The Progressive Corp., Progressive Preferred Ins. Co. and CCC Information Services, Inc., No. 99 Ch 15557 (10/28/99); * Myers V. Travelers Property Casualty Corp., The Travelers Indemnity Company of America, And CCC Information Services, Inc., No. 00 Ch 2793 (Filed 2/22/00). In the Cook County cases, plaintiffs allege that their individual insurance companies, using CCC's TOTAL LOSS valuation product, offered plaintiffs an inadequate amount for their automobiles. The plaintiffs further allege that CCC's TOTAL LOSS product does not provide fair, accurate values for used vehicles. The plaintiffs assert various common law and statutory claims against CCC and the individual insurers. In each case, plaintiffs seek to represent a class of customers who made a total loss claim for which their individual insurer defendant used a valuation report by CCC, and who allegedly did not receive the market value of their automobile. Plaintiffs seek unspecified compensatory and punitive damages and an award of attorneys' fees and expenses. Certain of the insurance company defendants have filed preliminary motions to dismiss plaintiffs' claims and/or to compel appraisals. Those motions are currently pending. BP AMOCO: Discloses Chem-Lab Risks and Fends off Would-Be Lawsuit ----------------------------------------------------------------- It's the summer of 1999, and the company was being sued by the families of six scientists stricken with a rare form of brain cancer. All were diagnosed soon after retiring from long careers at BP Amoco's chemical research lab in Naperville, Ill., and five were already dead. Because BP Amoco is so big and rich -- sales topped $ 100 billion in 1999 -- a jury might see Robin Hood justice in socking your company with damages that rival a Lotto jackpot. Then there was this bombshell: The outside medical experts concluded the brain-cancer cluster was probably work-related. H. Laurence Fuller, co-chairman of BP Amoco PLC. called a press conference and disclosed everything. According to the Business Week, many corporate lawyers would have advised Fuller that his was the dumbest move imaginable, but BP Amoco is proving that when it comes to workplace liabilities, honesty is the best policy. By taking the moral high ground, the company deftly upstaged its foes in the court of public opinion, denying them a chance to turn it into another corporate ogre. Now, it is casting itself in the same sympathetic role in a court of law. The company won dismissal last year of a would-be class action. In March, the families of five of the chemists with brain cancer dropped their lawsuits for cash settlements, one for as high as $ 2.7 million. ''Other defendants allow themselves to be put on the defensive,'' says Victor E. Schwartz, a senior partner at the Washington law firm Crowell & Moring. ''BP Amoco broke the vilification.'' Candor, however, doesn't come cheap or guarantee absolution, the Business Week remarks. BP Amoco spent millions to hire top-flight medical investigators and specialists and millions more on the recent settlements. Although widespread reports about the mysterious cancers did nothing to hinder British Petroleum Co.'s takeover of Amoco Corp. in 1998, the company's labs, once acclaimed for breakthroughs in polymer research, are today known by potential recruits as causing cancer. Undoubtedly, the company would have suffered regardless of its response. But by stonewalling, it would have lost any chance to mold its image with the public. Frankness has not stopped BP Amoco from getting sued either, the article goes on. In fact, the company may have turned itself into something of a litigation magnet by releasing such incriminating findings. Even with the March settlements, BP Amoco stands accused by an additional two dozen plaintiffs with a variety of seemingly unrelated tumors. But the payoffs will continue if these suits go to trial. After learning of the research-center cancers, BP Amoco shuttered the lab, offered free MRIs to employees, and hired medical experts to comb through medical records of all 1,676 people who had been employed at the ''cancer building.'' Since the company has owned up to its responsibilities, perhaps the public will think there's less need to slap it with exorbitant damages. That means if BP Amoco loses, it could end up paying less in compensatory and punitive damages, say outside lawyers. Notes Thomas Donaldson, a business professor at the Wharton School and director of its ethics program: ''It seems to me that a company that shows it has heart is going to get a better hearing when it comes to the jury box.'' The Business Week says that despite so much to gain by going public, many companies do not choose to come clean because corporate lawyers generally instruct clients to hunker down and deny everything. That rote advice does have some logic. Without evidence, plaintiffs may not be able to even bring a case, let alone prove it in court. If no one else knows, they figure, the problem will eventually go away, and the company will have saved itself a public tarring and big-time legal fees. But as corporate defendants are learning, it is harder and harder to keep secrets today. Bad news can spread on the Internet or a 24-hour cable channel faster than ever before. Once the word gets out, it's usually too late. That's because the act of covering up is criminal in and of itself. ''You could try to hide it, and you might get away with it 5 times out of 10, or even 9 times out of 10, but the risk of getting caught even that one time would be severe,'' observes David E. Van Zandt, dean of Northwestern University's law school. ''You look like a bad actor.'' So far, BP Amoco seems to be avoiding that fate. One of its smartest moves was to hire researchers from Johns Hopkins University and the University of Alabama at Birmingham to construct medical histories of everyone who had ever worked in the Naperville lab. The goal: to uncover an on-the-job link between those with the rare and fatal brain tumors, called gliomas, and the thousands of chemicals the scientists handled since the labs opened in 1970. In the end, the researchers failed to identify a chemical or a combination of chemicals responsible for the cancers. But they found that all six of the cancer victims were white men, assigned to the same building wing at some point in their careers, who had worked at the center for at least 10 years. The glioma rate among this group was 12 times as high as in a normal population, suggesting the cluster was related to something in the workplace. That BP Amoco gets credit for this rankles some plaintiffs' lawyers. They dismiss the study as little more than a publicity stunt crafted to make BP Amoco seem like a good guy. ''That's not exactly a news flash -- everyone already knew there were too many gliomas,'' says Tilden Katz of Corboy & Demetrio, a Chicago law firm representing 16 plaintiffs, including the sixth researcher found with brain cancer. Still, it's hard to argue that BP Amoco didn't do the right thing. Marios N. Karayannis, a partner at Brady & Jensen in Elgin, Ill., sued BP Amoco on behalf of six people who claim they got cancer by working at the lab, including his father, Nicholas, who died in February, 1998. Karayannis settled his father's suit on Mar. 21 for an undisclosed sum. The workplace probably killed his dad, he says. But he adds: ''My father enjoyed working there. Becoming bitter would not honor his time there.'' What company wouldn't want to be regarded like that? (The Business Week, June 5, 2000) COMMERCIAL FINANCIAL: Bankruptcy Ct Considers Pay to Laid Off Workers --------------------------------------------------------------------- A federal bankruptcy judge has taken under advisement a proposal by attorneys for Commercial Financial Services Inc., its creditors and bondholders to give a week's worth of pay to 1,367 workers laid off between Jan. 8, 1999, and Feb. 8, 1999. Attorneys made the offer in U.S. bankruptcy court. In exchange for the pay, less taxes, the former workers would sign a release promising not to sue over their layoffs from the now-defunct debt collection company. "This settlement will make a lot of claims go away," said CFS attorney Larry Wolfson. "We won't know how many until we give them the opportunity." Attorneys representing a group of workers in a class-action lawsuit against CFS argued against the proposal. Attorney Michael McCune described the offer as an attempt by CFS to circumvent the class-action lawsuit. Attorney Jed Penny said the offer might be the equivalent of having workers "halfway opting out" of the lawsuit. He said there was no need for workers to take the settlement and drop out of the lawsuit. "Is the acceptance of a settlement offer opting out?" he said. "I think that settlement is opting out." The proposal is similar to one the bankruptcy court approved last summer. CFS spent more than $2.2 million to stave off lawsuits from employees let go when the company ceased operations. About 98 percent of former employees took the earlier offer that amounted to two weeks pay for the 1,400 people let go when the company finally shut down. The class-action lawsuit pending contends the company violated federal law on the amount of warning that must be given before a significant layoff of personnel. CFS filed for bankruptcy on Dec. 11, 1998, as a step in trying to keep the Tulsa-based business open. It ceased operations in June 1999. The company had more than 3,900 employees in Tulsa and Oklahoma City. In the hearing, CFS attorney Caroline Benediktson said the former CFS workers were smart enough to decide whether to take the week's pay settlement offer or remain in the class-action lawsuit and take a chance on a payday that could be much greater or zero. Bankruptcy Judge Dana Rasure said she would rule on the planned offer. (The Associated Press State & Local Wire, June 1, 2000) CONDOR TECHNOLOGY: Allegations in MD over Y2K Dismissed within Months --------------------------------------------------------------------- On or about July 1, 1999, an action was commenced against the Company and its Chief Executive Officer in the United States District Court for the District of Maryland, captioned Gordon V. Condor Technology Solutions, Inc., Et Al., Civil AMD-99-1952. The plaintiff purported to bring the action on behalf of a class consisting of all persons (other than the defendants and their affiliates) who purchased Common Stock in the Company between February 3, 1999 and June 8, 1999. The plaintiff contended that, during the Alleged Class Period, the defendants made false and misleading statements about the future impact of the "Year 2000" issue on the Company's business and on the concentration of the Company's business with certain customers. The Company believes that the statements challenged by the plaintiff were accurate, and that the plaintiff's allegations of wrongdoing were baseless. On November 4, 1999, the Court issued an Order dismissing the class action lawsuit against the Company and its officer. CYBER-CARE, INC: Gilman and Pastor Files Securities Suit in Florida ------------------------------------------------------------------- Gilman and Pastor, LLP has filed a securities class action lawsuit in the United States Court for the Southern District of Florida against CyberCare, Inc. (NasdaqNM: CYBR) and certain officers and directors of the Company on behalf of purchasers of CyberCare common stock during the period October 12, 1999 through May 19, 2000, inclusive (the "Class Period"). Plaintiff's complaint alleges that defendants violated the federal securities laws by issuing a series of false and misleading statements to the investing public concerning the business and financial operations of CyberCare. In particular, defendants misrepresented that CyberCare's Electronic Housecall ("EHC") system was "market-ready" and that the Company had received hundreds of thousands of orders for the product, when in fact, the FDA had not yet approved the EHC system for marketing or sale, any agreement to sell the system would violate FDA regulations prior to approval, and demand for EHC system consisted mainly of vague expressions of interest by entities that lacked the wherewithal to acquire the system. These misstatements are alleged to have inflated the price of CyberCare common stock purchased by investors during the Class Period. Contact: Peter Lagorio of Gilman and Pastor, LLP, 617-589-3750, petelagorio@aol.com GTE CORPORATION: Milberg Weiss Files Securities Lawsuit in NY ------------------------------------------------------------- The law firm of Milberg Weiss Bershad Hynes & Lerach LLP announces that a class action lawsuit was filed on June 1, 2000, on behalf of shareholders of GTE Corporation ( "GTE" or the "Company") (NYSE:GTE) who held GTE common stock on March 29, 2000. A copy of the complaint filed in this action is available from the Court, or can be viewed on Milberg Weiss' Web site at: http://www.milberg.com/gte/ The action, numbered 00CIV4117, is pending in the United States District Court for the Southern District of New York, located at 500 Pearl Street, New York, N.Y., against defendants Charles Lee, Edwin Artzt, James Barker, Edward Budd, Robert Daniell, Kent Foster, James Johnson, Richard Jones, James Ketelsen, Michael Masin, Sandra Moose, Russell Palmer, Robert Storey, who collectively constitute GTE's board of directors, and GTE. The Honorable Harold J. Baer is the Judge presiding over the case. The complaint charges that defendants violated Sections 14(a) and 20(a) of the Securities Exchange Act of 1934, and Rule 14a-9 promulgated thereunder, by disseminating a materially false and misleading proxy statement (the "Proxy Statement"). In connection with seeking shareholder approval of a merger between GTE and Bell Atlantic, defendants disseminated a Proxy Statement representing that the dividend of the post merger entity will be nearly identical to the current dividend of GTE. This statement was false when made because the post merger entity will release quarterly dividends one month later than GTE's customary dividend releases. Because of the over one billion outstanding shares of GTE, the one month delay will result in a material loss of the time value of the dividends. Contact: Milberg Weiss Bershad Hynes & Lerach, New York Steven G. Schulman or Samuel H. Rudman, 800/320-5081 E-mail: gtecase@milbergny.com GUN MAKERS: PA Joins Communities Dropping Suits Against Smith & Wesson ---------------------------------------------------------------------- U.S. Housing Secretary Andrew Cuomo and Mayor John Street on June 2 announced that Philadelphia will join 17 local governments that have dropped lawsuits against Smith & Wesson as a result of a gun safety agreement the gunmaker signed with the Clinton Administration, states and localities. The historic agreement, signed in March, requires Smith & Wesson to make major changes in the design, distribution and marketing of guns to make them safer and to keep them out of the hands of children and criminals. "Our agreement with Smith & Wesson will save lives in communities across America," Secretary Cuomo said. "Philadelphia's decision to join this agreement is a major step forward that should encourage other gun companies to join Smith & Wesson to produce safer firearms and to keep guns out of the wrong hands. Gunmakers should realize that settling lawsuits filed against them is in their own self-interest as well as the public interest." Mayor Street said: "This is a watershed moment in the future of gun manufacturing and in the area of handgun safety. Gun manufacturers must acknowledge their responsibility to protect the public health and welfare from the illegal or inappropriate uses of their products. We applaud Smith & Wesson for its commitment to protect our children from the devastation caused by guns on our streets." The March agreement is the product of negotiations between the White House, the Department of Housing and Urban Development, the Treasury Department and local governments with Smith & Wesson. The agreement was designed to settle lawsuits already filed against the gun manufacturer and to make new lawsuits unnecessary. Key provisions of the agreement require Smith & Wesson -- the nation's largest handgun manufacturer -- to: 1) Install mandatory gun locks and other child-safety devices on all guns. 2) Introduce "smart gun" technology in all newly designed handguns to allow the guns to be fired only by their owners -- making the guns useless to children and criminals. 3) Bar gun sales -- including gun show sales -- without a background check of the buyers. 4) Limit multiple handgun sales. 5) Include hidden serial numbers on guns to make them easier for law enforcement to trace after a crime. 6) Refrain from marketing guns in ways that appeal to children or criminals. 7) Establish a trust fund to implement a public service campaign to inform people about the risk of firearms in the home, proper home storage, the importance of proper gun disposal, and the need to reduce gun violence. The goal of the agreement is to reduce the toll of gun violence, which each year claims more than 30,000 lives and injures another 100,000 people in crimes, accidents and suicides around the United States. Gun violence is a major problem in the nation's public housing developments, which are often located in neighborhoods with the highest crime rate in a community. According to recent HUD study, residents of public housing are more than twice as likely to suffer a firearm-related incident as compared to non-residents. About 3 million low-income people live in public housing. In response to the Smith & Wesson agreement, officials from more than 411 state and local governments around the nation have joined the Communities for Safer Guns Coalition. Officials in the Coalition sign a pledge saying they support giving favorable consideration to making purchases from gun manufacturers that have adopted gun safety and dealer responsibility standards. The preference applies to comparable weapons available at a comparable price that meet law enforcement agency needs. A purchase preference by governments for guns that meet certain standards can act as an incentive to manufacturers to adopt those standards -- much as the demand for certain types of cars by motorists prompts auto makers to make more such vehicles. Cuomo pointed out that incidents of gun violence in the last few days illustrate the need for other gunmakers to reform their practices. These incidents include: 1) The shooting of a teacher in Lake Worth, FL by a student. If the gun the boy stole from his grandfather had a trigger lock, the tragedy might have been averted. 2) In a public housing development in Chicago, a 12-year-old and his 14-year-old brother were playing with a gun in a hallway, and the 12-year-old was fatally shot. Again, a trigger lock might have made a difference. 3) In Montclair, NJ, authorities uncovered a scheme where two juveniles were buying semiautomatic handguns over the Internet. They passed themselves off as licensed gun dealers using forged federal firearms licenses. HUD and the Treasury Department entered the negotiations with Smith & Wesson after President Clinton said his Administration could support a class action lawsuit by the nation's 3,200 public housing authorities that would be designed to reduce gun violence in public housing and nearby areas. A commission made up of two representatives from local governments, one from states, one from Smith & Wesson and one selected by the U.S. Bureau of Alcohol, Tobacco and Firearms will oversee the agreement with Smith & Wesson. The U.S. government will require any additional gun manufacturers joining in the agreement to meet the requirements set for Smith & Wesson, along with additional safety and distribution measures. Guns manufactured and sold to the military and law enforcement agencies will be granted an exception to the safety features mandated by the new agreement, if the military or law enforcement agencies certify the need. Clinton Administration's Gun Safety Agenda In addition to the landmark gun safety agreement reached with Smith & Wesson, other parts of the Clinton Administration's gun safety agenda include: A $280 million national firearms enforcement initiative that is part of the President's proposed budget. The initiative would hire 500 new Bureau of Alcohol, Tobacco and Firearms agents and inspectors to target gun criminals; hire more than 1,000 prosecutors at all levels of government; fund expanded crime gun tracing and ballistics imaging systems to catch more gun criminals; fund local media campaigns to discourage gun violence; and expand the development of "smart gun" technologies. A $30 million Community Gun Safety and Violence Reduction Initiative that President Clinton proposed in his Fiscal Year 2001 Budget. The initiative, which would be administered by HUD, would fund computerized mapping of gun violence to help law enforcement agencies better protect the public, education and outreach programs to promote responsible safety measures by gun owners, and innovative community activities to reduce both gun crimes and accidents. Under this initiative, local governments, law enforcement agencies, public housing authorities, community organizations, and other groups would be eligible to compete for HUD grants to support gun violence reduction activities in the communities the Department serves. Last week, a House committee rejected funding for this program. Gun buyback programs around the nation funded by HUD. So far this year more than 14,000 guns have been collected in 55 cities, with more than 30 gun buybacks planned in the coming months. HOLOCAUST VICTIMS: Talks Fail to Resolve Legal Wrangle; Resumes June 12 ----------------------------------------------------------------------- U.S. and German negotiators said last Friday June 2 they had again failed to resolve a legal wrangle that could delay plans to pay billions of dollars in compensation to survivors of Nazi-era slave and forced labour programmes. The chief American and German negotiators - U.S. Deputy Treasury Secretary Stuart Eizenstat and Berlin's Otto Graf Lambsdorff - said at a press conference that while progress had been made, the two sides would have to meet again in Washington on June 12. "This must then be the time we reach final results," said Lambsdorff, adding that all parties involved in the talks were confident the remaining problems could be resolved. German insistence on iron-clad guarantees that its companies won't face further lawsuits in U.S. courts scuppered hopes that a final deal could be signed by German Chancellor Gerhard Schroeder and U.S. President Bill Clinton who is currently visiting Germany. Last year the German government and business leaders each agreed to fund half of a 10 billion mark (4.7 billion dollar) compensation fund for ex-Nazi slaves. So far German industry has pledged three billion marks. Manfred Gentz, the DaimlerChrysler executive who represents German business in the talks, says agreement on an accord protecting industry from further class action suits would likely unleash more donation pledges. Negotiations have dragged on for over a year and the latest failure could jeopardise German government plans to begin payments to the one million eligible forced labourers and over 200,000 death camp slave labour survivors before the end of the year. Many of ex-slave labourers are now U.S. citizens, while most of the forced labourers to be compensated come from Eastern Europe. Eligible claimants will receive up to 15,000 marks (7,256 dollars) each. (Deutsche Presse-Agentur, June 2, 2000) INMATES LITIGATION: WI Has Authority to Send Inmates out, Ap Ct Rules --------------------------------------------------------------------- A circuit court erred when it ruled the state Department of Corrections lacks the authority to transfer inmates to out-of-state private prisons, a state appeals court ruled. The 4th District Court of Appeals ruled that unless the inmates can show that conditions at out-of-state prisons are more restrictive than those in any state prison, there is no basis for their claim that they have a legally enforceable interest not to be transferred outside Wisconsin. The appeals court also rejected the argument made by the four inmates who filed the lawsuit that because state statutes do not expressly grant transfer authority separate from the state's authority to contract with out-of-state prison that the Legislature intended to prevent the department from transferring prisoners out of state. To alleviate congestion in Wisconsin prisons, the department rents space in several states for about 3,500 convicts. Other state statutes that permit the Corrections Department to contract with local governments to hold state prisoners in county jails are interpreted to include the authority to transfer inmates to those jails, the appeals court said. Circuit Judge Moria Krueger had ordered the department not to transfer the two inmates who were still in Wisconsin prisons and to return two others who were being held in out-of-state prisons. June 1's decision orders the Dane County Circuit Court to dismiss the lawsuit. The judge specified that the lawsuit was not a class action and her order would apply only to the four inmates involved in the case, not to all of the several thousand prisoners serving time in out-of-state cells. Two of the inmates, William Evers and Barry Smalley, are serving their sentences at a state prison in Oshkosh. Clifford Ferguson is housed at the Comanche County Jail in Texas and Roger Vander Logt is serving his sentence at a private prison at Whiteville, Tenn. Wisconsin has been sued in state and federal court in at least 25 other instances by inmates who object to imprisonment in other states and has won each time, state attorneys said. (The Associated Press State & Local Wire, June 1, 2000) KAISER ALUMINIUM: Faces a Number of Asbestos-related Lawsuits ------------------------------------------------------------- Kaiser Aluminium and Chemical Corporation is a defendant in a number of lawsuits, some of which involve claims of multiple persons, in which the plaintiffs allege that certain of their injuries were caused by, among other things, exposure to asbestos during, and as a result of, their employment or association with KACC or exposure to products containing asbestos produced or sold by KACC. KAISER ALUMINIUM: Plaintiffs Want Gramercy Explosion Suits in LA State ---------------------------------------------------------------------- On July 5, 1999, Kaiser Aluminium and Chemical Corporation�s Gramercy, Louisiana, alumina refinery was extensively damaged by an explosion in the digestion area of the plant. The cause of the accident is under investigation by KACC and various governmental agencies. In January 2000, the U.S. Mine Safety and Health Administration issued 21 citations and in March 2000 proposed KACC be assessed a penalty of $.5 million in connection with its investigation of the Gramercy incident. The citations allege, among other things, that certain aspects of the plant's operations were unsafe and that such mode of operation contributed to the explosion. KACC has previously announced that it disagrees with the substance of the citations and has challenged them and the associated penalty. It is possible that other civil or criminal fines or penalties could be levied against KACC. Twenty-four employees were injured in the incident, several of them severely. KACC may be liable for claims relating to the injured employees. The incident has also resulted in more than thirty-five lawsuits, most of which were styled as class action suits, being filed against KACC on behalf of more than 13,000 claimants. The lawsuits allege, among other things, property damage and personal injury. Such lawsuits were initially filed, on dates ranging from July 5, 1999, through December 26, 1999, in the Fortieth Judicial District Court for the Parish of St. John the Baptist, State of Louisiana, or in the Twenty-Third Judicial District Court for the Parish of St. James, State of Louisiana, and such lawsuits have been removed to the United States District Court, Eastern District of Louisiana, and are consolidated under the caption Carl Bell. et al. V. Kaiser Aluminum & Chemical Corporation, No. 99-2078, et.seq. Plaintiffs have filed motions to remand the actions to state court, and the federal court has taken the matter under advisement. The cases are currently stayed pending mediation between the parties. The aggregate amount of damages sought in the lawsuits cannot be determined at this time. MATTEL INC: Emerges from Stockholder Suit over Old Learning Merger ------------------------------------------------------------------ On December 16, 21, and 23, 1998, several stockholders of the legal entity The Learning Company, Inc. that merged into Mattel ("Old Learning Company") filed six separate purported class action complaints in the Court of Chancery of the State of Delaware in and for New Castle County against Old Learning Company and Old Learning Company's board of directors for alleged breaches of fiduciary duties in connection with the May 1999 merger. The six complaints were consolidated. The consolidated complaint named Mattel as an additional defendant, claiming that Mattel aided and abetted the alleged breaches of fiduciary duty. On March 9, 2000, the plaintiffs filed a notice and order of dismissal dismissing the action without prejudice. On March 13, 2000, the Court formally dismissed the action by entering the order. MATTEL INC: Stockholders File Suits in CA and DE over Mismanagement ------------------------------------------------------------------- On October 25, 1999, a Mattel stockholder filed a derivative complaint on behalf and for the benefit of Mattel in the Superior Court of the State of California, County of Los Angeles. The complaint alleges that Mattel's directors breached their fiduciary duties, wasted corporate assets and grossly mismanaged Mattel in connection with Mattel's acquisition of Learning Company and seeks both monetary and injunctive relief. On February 10, 2000, the Court dismissed the complaint with leave to amend. On March 10, 2000, Mattel and the other defendants entered into a stipulation with the plaintiff staying the action. On March 17, 2000, a Mattel stockholder filed a second derivative complaint on behalf and for the benefit of Mattel in the Superior Court of the State of California, County of Los Angeles. On March 27, 2000, a Mattel stockholder filed a third derivative complaint on behalf and for the benefit of Mattel in the Court of Chancery of the State of Delaware in and for New Castle County. Both complaints generally allege that Mattel's directors breached their fiduciary duties and grossly mismanaged Mattel in connection with Mattel's acquisition of Learning Company. The complaints seek both monetary and injunctive relief. Mattel believes the purported class actions and derivative suits are without merit and intends to defend them vigorously. MATTEL INC: Stockholders Sue upon Announcement of Earnings Shortfall -------------------------------------------------------------------- Following Mattel's announcement on October 4, 1999 that it expected an earnings shortfall at its Learning Company division in the third quarter of 1999, several of Mattel's stockholders filed purported class action complaints naming Mattel and certain of its present and former officers and directors as defendants. The complaints generally allege, among other things, that the defendants made false or misleading statements that artificially inflated the price of Mattel's common stock by overstating the revenues and net income of Mattel, and its Learning Company division, and by falsely representing that the May 1999 acquisition of Learning Company would be immediately accretive to Mattel's 1999 and 2000 financial results. Two additional purported class action complaints have been brought against Mattel as successor to Learning Company and the former directors of Learning Company on behalf of former stockholders of Broderbund Software, Inc. ("Broderbund") who acquired shares of Learning Company in exchange for their Broderbund common stock in connection with the Learning Company-Broderbund merger on August 31, 1998. The complaints in those actions generally allege that Learning Company misstated its financial results prior to the time it was acquired by Mattel. The purported class actions brought on behalf of Mattel and Broderbund stockholders are all currently pending in the United States District Court for the Central District of California. PHONE FIRMS: Off the Hook on Chicago Telecom. Tax Suit Seeking Refund --------------------------------------------------------------------- Plaintiffs challenging the validity of a tax authorized by ordinance must name the taxing municipality as a defendant in the lawsuit, the 1st District Appellate Court ruled. The panel upheld Cook County Circuit Judge Thomas P. Quinn's dismissal of a two-count complaint filed on behalf of three cellular phone subscribers who pursued a suit against their service providers. The plaintiffs sought a refund for taxes paid under the Chicago Telecommunications Tax on incoming calls from 1995 through 1997. A judge granted the City of Chicago's motion to intervene in the case. The appeals court panel initially released its decision in the case on April 19 as an unpublished order under Illinois Supreme Court Rule 23. The city then filed a motion asking the appeals court to publish its decision. The city's motion said the ruling should be published because it establishes a rule of law that was not clearly set forth in previous cases decided by Illinois reviewing court: That suing the collector of a tax authorized by an ordinance, instead of the municipality, is not the proper way to litigate the legality of a taxing ordinance." The Appellate Court granted the city's motion to publish the decision two weeks ago. This decision, if published, will make it clear to potential plaintiffs that they must name the taxing municipality as a defendant if they bring suit to challenge the validity of a tax ordinance," the motion continued. Cases similar to this case have been filed and may be filed in the future." Chicago lawyer Terrence P. Buehler, who represents the plaintiffs, said he doesn't expect to ask the Illinois Supreme Court to review the appeals court's decision. Instead, Buehler said, he and co-counsel in the case likely will file a new lawsuit seeking class-action status and naming the city as the defendant, but not including the phone companies. A spokeswoman for the city's Law Department said attorneys there will defend the constitutionality of the ordinance establishing the 5 percent telecommunications tax on cell phone use for Chicago residents. We would rather not be sued at all, of course," said Jennifer Hoyle. But if there is going to be a challenge to this tax, we feel that it's appropriate and necessary for the city to be a party to the litigation." The lawsuit at issue was filed in the Circuit Court during 1997 on behalf of plaintiffs Claudia E. McGuire, Santiago A. Durango and George Diamond Steak House. The complaint maintained that from 1995 through 1997 the city was allowed to tax only outgoing calls under the amended sections of the city's telecommunications tax. The defendants named in the suit were Ameritech Cellular Corp., Southwestern Bell Mobile Systems Inc., doing business as Cellular One of Illinois, and MCI, doing business as Nova Cellular. The three companies collected the taxes during the two-year period. The complaint's first count charged that the defendants breached their service contracts when they collected taxes on calls the plaintiffs maintained were not covered under the city's ordinance. The second count asserted that the defendants violated the Illinois Consumer Fraud and Deceptive Practices Act by listing the challenged tax as a local tax" on phone bills. The defendants also failed to identify the tax as the Chicago Municipal Tax, which applies to outgoing and incoming calls billed to a Chicago address, regardless of where the calls were made or received, according to the lawsuit. The phone company defendants then filed a motion to dismiss, which Quinn granted, holding that no matter how it is framed, the basis of plaintiffs' breach of contract claim is that the phone companies wrongfully charged them a tax which was not due. As such, this action against the phone companies cannot stand." Quinn further found that the complaint failed to state a claim under the Consumer Fraud Act. The judge also granted the city's motion to dismiss, holding that the city's application of the challenged tax was constitutional, the appeals court panel said. The plaintiffs then appealed Quinn's dismissal of their complaint with prejudice to the 1st District. We ... do not believe that suing the collector of a tax authorized by ordinance is the proper way to litigate the legality of a taxing ordinance," Justice Robert Cahill wrote for the panel in the five-page opinion. The panel added, We do not believe this consumer fraud theory is pled with the particularity and specificity needed to withstand a motion to dismiss." The justices said they did not need to address the city's constitutional and statutory construction arguments included in its motion to dismiss. Plaintiffs did not amend their complaint to state a cause of action against or ask for relief from the city," the panel held. The issues raised by the city are not properly before us on appeal." Justices David Cerda and Warren D. Wolfson concurred in the opinion. Mardell Nereim, an assistant Chicago corporation counsel, argued the case before the appeals court. Helen E. Witt, a Kirland & Ellis partner representing Ameritech, argued on the defendants' behalf before the panel, Hoyle said. Attorneys with Jenner & Block represented MCI, while Lord, Bissell & Brook lawyers represented Southwestern Bell. The case is Claudia E. McGuire, et al. v. Ameritech Cellular Corp., et al., No. 1-99-1462. (Chicago Daily Law Bulletin, May 31, 2000) POTASH CORP: 8th Cir Reverses Antitrust Claims in Conscious Parallelism ----------------------------------------------------------------------- In a decision that should interest any producer or manufacturer in price-sensitive markets where "conscious parallelism" occurs, the Eighth Circuit Court of Appeals, sitting en banc, reversed a prior decision of a panel of that same Court, and threw out class claims for illegal conspiracy under 1 of the Sherman Act. In Blomkest Fertilizer, Inc. v. Potash Corp. of Saskatchewan, the full panel of the Eighth Circuit affirmed the district court's grant of summary judgment against a class of plaintiffs alleging potash producers conspired to fix prices. 203 F.3d 1028 (8th Cir. 2000). The en banc Blomkest majority provoked a sharp dissent by five circuit judges that accused the majority of requiring "direct evidence to withstand summary judgment in an antitrust case." The underlying facts of Blomkest, coupled with the strong dissent, call into question whether this decision sounds the death knell of circumstantial proof of so-called "plus factors" as evidence of illegal conspiracy, or should more appropriately be viewed as a product of weak evidence of conspiracy given legitimate market conditions. Potash, a mineral, is an essential fertilizer ingredient. Demand for potash is inelastic, meaning potash consumers will neither buy less if the price rises, nor buy more if the price drops. Thus, a producer who sells for more than the rest of the market risks loss of market share. The North American potash industry is an oligopoly, essentially consisting of a small number of mostly Canadian producers. Until 1989, the government owned the largest Canadian potash producer, Potash Corporation of Saskatchewan Inc. ("PCS"). The majority noted that PCS held 38% of the North American production capacity, and, as a governmental entity, "had no mandate to maximize profits, and was not accountable to private owners," seeking instead to maintain employment and boost the local economy. The lack of profit motive spelled disaster for PCS and other producers: PCS suffered "huge" losses, causing the price of potash to fall to historic lows in the 1980s. PCS was privatized in 1989, at which time it reduced output and raised its prices. Of similar interest was a 1986 complaint filed by American potash producers with the U.S. Department of Commerce, in which Canadian producers were accused of "dumping" potash in the United States. In 1987, the Commerce Department ordered the Canadian companies to post bonds, but in 1988, it negotiated a Suspension Agreement with the Canadian producers. The agreement, still in effect when the majority rendered its opinion, set a minimum price at which each Canadian producer could sell potash in the United States. After the agreement, PCS raised its prices and market prices rose to levels "markedly" higher than in the 1980s. The issue splitting the Blomkest court revolved around what showing a party must make to survive a summary judgment motion in an antitrust case. In the mid-1980s, two U.S. Supreme Court decisions provided the standard for evaluating Sherman Act 1 antitrust violations in the summary judgment context. See Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574 (1986); Monsanto Co. v. Spray-Rite Serv. Corp., 465 U.S. 752, 764 (1984). These decisions held that conduct consistent with both permissible competition as well as illegal conspiracy does not, standing alone, support an inference of antitrust conspiracy. Rather, in cases where a party opposing summary judgment (usually the plaintiff) offers circumstantial evidence of an antitrust conspiracy, it "must present evidence that 'tends to exclude the possibility' that the alleged conspirators acted independently." If the plaintiff fails to present such evidence, the court should enter summary judgment in the defendant's favor. The class in Potash relied on the theory of conscious parallelism to support its antitrust conspiracy claim. But only in cases where certain "plus factors" exist will a court infer an improper anticompetitive agreement. The class offered three plus factors: (1) interfirm communications between the producers; (2) acts by the producers allegedly against their self-interest; and (3) an expert report purporting to show the price of potash would have been substantially lower absent collusion. The majority, however, found the evidence "far too ambiguous" to support an inference of conspiracy. First, the price verifications between the firms concerned completed sales, rather than future market prices. Second, the possibility of independent action could not be excluded, considering the oligopolistic market in which the producers operated. Third, the class had only presented several dozen price-verification communications between the firms for the seven-year period in question, although tens of thousands of transactions would have occurred. The court quickly dispatched the other two plus factors. It noted the actions alleged to be against the producers' self-interest could also be explained by an independent business justification. For instance, the uniform participation in the Suspension Agreement with the Commerce Department reduced uncertainty, eliminated the need to post substantial bonds, and resulted in higher prices. As to the third plus factor, the court discounted the expert testimony because the expert failed to take into account the PCS privatization and the anti-dumping proceeding. Without any plus factors, the court concluded the class failed to present evidence of collusion between the potash producers. The dissent, on the other hand, believed "the class has adduced abundant evidence" of plus factors, most importantly, "significant evidence of solicitations to enter a price-fixing agreement." The dissent noted the exchange of price information between potash producers often occurred between high-level executives responsible for pricing decisions. The dissent also found persuasive the class's allegation that disclosing price information in an oligopoly was against the producers' self-interest because the practice of "shading" prices for individual consumers to capture sales from a competitor relies on secrecy to avoid retaliation. Exchanging price information about completed sales could, therefore, serve the important purpose of catching "cheaters" in an oligopolistic market conspiracy. In fact, the class had presented a potash executive's notes that used the term "cheating" in connection with a "market correction" program which the dissent inferred was a method of disciplining producers who breached an earlier agreement. The dissent also criticized the majority for glossing over the fact that prices rose dramatically after the alleged cartel began operating and instead focusing on the slight decrease in prices, which the dissent posited might be the result of cheating. Although the dissent accused the majority of rejecting circumstantial evidence of conspiracy and requiring direct evidence to withstand summary judgment, the majority provided no such express statement, presumably leaving intact the availability of resort to circumstantial evidence for proof of illegal conspiracy. Thus, the Blomkest majority's decision places two principles in tension. On the one hand, a plaintiff may rely on circumstantial evidence to prove an illegal conspiracy; on the other, the court appeared to assess the weight of the evidence - the quantum of proof as opposed to the existence of a genuine issue of material fact. This tension is relieved, however, when the evidence presented is considered in light of Monsanto's admonition that it must "tend to exclude" the possibility of independent action, and the actual market conditions existing before the alleged collusive activity. Clearly, the majority was unpersuaded that the evidence of plus factors urged by the class tended to exclude the possibility of independent action. For example, it gave no weight to the "smoking gun" memo relied upon by the class, noting that while dozens of "high ranking officials" were deposed, the memo had been used as an exhibit only once - with the witness testifying that he did not receive it. Similarly, other evidence did not exclude the possibility of independent action: the economic expert's report failed to address the two most critical market factors, privatization and dumping; the interfirm communications were infitesimal compared to the total volume of transactions; and market forces the dissent viewed as setting the stage for conspiracy prices were viewed implicitly by the majority as a result of factors leading to unrealistically low prices during the 1980s. In the final analysis, perhaps Blomkest is best read in light of two recent conscious parallelism decisions in which the Third and Ninth Circuit threw out the plaintiffs' antitrust claims that were supported only by circumstantial evidence of collusion. In re Baby Food Antitrust Litig., 166 F.3d 112 (3d Cir. 1999); In re Citric Acid Litig., 191 F.3d 1090 (9th Cir. 1999). Unquestionably, courts appear more willing to dispose of conscious parallelism allegations without a trial if they are satisfied the evidence shows independent pricing decisions. Accordingly, parties should consider this increased willingness when litigating conscious parallelism cases. (The Metropolitan Corporate Counsel, June, 2000) SECRET SERVICE: Black Agents Claim Retaliation for Racism Lawsuit ----------------------------------------------------------------- Five black Secret Service agents, including one now assigned to protect Vice President Al Gore, claimed last Thursday June 1 that they have been targeted for reprisals since initiating a federal lawsuit that accuses the agency of racial discrimination. The agents alleged that Secret Service Director Brian Stafford has attempted to silence them by encouraging top black supervisors to question their case. Secret Service officials again denied carrying out discriminatory workplace practices and said they have taken no unfair action against the black agents. The legal battle began in February, but the stakes were raised May 3, when five current and five former agents filed a class-action lawsuit in U.S. District Court. The lawsuit alleged that most black agents historically have been frozen out of promotions when they reached the notch below supervisory jobs. In court papers, attorneys John P. Relman and David J. Shaffer alleged that "each active Special Agent whose name appeared on the caption of this action has suffered retaliation at the hands of Secret Service Management for participating in this lawsuit and for raising concerns about the fair treatment of African-Americans in the Secret Service." John E. Turner, one of the two original plaintiffs in the case, said he was transferred May 7 from a supervisory job to one with no management responsibilities. Reginald G. Moore, the other original plaintiff, said he again was passed over for promotion in the Dallas field office even though he scored 98.57 out of a possible 100 points in his evaluation. Luther K. Ivery, who helps protect foreign dignitaries, said he hadn't even joined the lawsuit when a supervisor warned him against taking part. Secret Service officials have countered with statistics pointing out that two of the agency's seven assistant directors are black and so are the heads of four of the agency's 11 largest field offices. (The News and Observer (Raleigh, NC), June 2, 2000) TOBACCO LITIGATION: Judge Warns against Dawdle; Fed Suit Moves Forward ---------------------------------------------------------------------- Judge Gladys Kessler has set a ground rule for the federal government's landmark lawsuit against Big Tobacco, which moves forward last Friday, June 2, in her courtroom: no lollygagging. Kessler, 62, has warned both sides not to dawdle. But that doesn't guarantee a quick resolution of the case. She has said it could go to trial in January 2003, if she agrees to let it continue and if the next presidential administration does not withdraw it. The two sides were to debate in court on June 2 on the tobacco industry's motion to dismiss the U.S. lawsuit, which aims to reclaim billions of taxpayer dollars spent to treat ill smokers. Her decision on dismissal, however, could take months. Kessler is no dream judge for cigarette makers, who are also battling a class-action lawsuit in Miami. Appointed by President Clinton in 1994, she's considered a pioneer of public-interest law and one of the more liberal, pro-regulatory judges on the U.S. District Court here. She has also refused to dismiss claims by labor union health funds against the tobacco industry. That differs from most federal judges nationwide who have considered the matter. "On public policy grounds alone, the claims of the health funds need to be heard," Kessler ruled in December. "It would be nothing short of unconscionable to conclude that foreseeable wrongs of such magnitude and moral culpability, if proven, must go unremedied because our legal system deemed them unworthy of recognition." Michael Spencer, the New York lawyer who argued on behalf of the union health funds, says Kessler's ruling in that case "should be indicative" of how she might rule in the federal government's case. David Adelman, a tobacco industry analyst at Morgan Stanley Dean Witter, says the union case suggests that she will not dismiss the federal case, which he argues lacks merit. "The most significant thing about Judge Kessler is that ruling," Adelman says. However, he adds, "It's certainly possible another attorney general would drop this case." Analysts note that Kessler did not side totally with the union health funds. She granted tobacco industry motions to dismiss several of the 10 counts. "There's not a soul in America who could predict what she'll do," says Judith Lichtman, a Kessler friend since 1966 and president of the National Partnership for Women and Families. Kessler helped found the group, which opposes sex discrimination and was known until recently as the Women's Legal Defense Fund. "She's the most open-minded, thoughtful person I've ever met," Lichtman says. "She's not predictable. She's not a knee-jerk anything. She calls it as she sees it." Several long-time associates say Kessler is not afraid to buck those who may seem to be her "natural" allies. She's also not afraid of breaking ground. One of the few women in her Harvard Law School class of 1962, she and two partners founded the first public-interest law firm in Washington, D.C. At the George Washington University, she taught one of the first law school courses on women's rights. In 1983, the Women's Bar Association named her "Woman Lawyer of the Year." "She has a very pleasant exterior but is tough-minded and tenacious," says Susan Hoffman, a Washington lawyer who argued many child abuse and neglect cases before Kessler when she was a Superior Court judge. Hoffman says Kessler is distinctive for another reason: "She believes strongly in settlement." Lawyers who know her expect that she would eventually nudge the two sides in the federal case toward settlement. Kessler declined an interview. The two sides appear in no mood for negotiation. The Justice Department's complaint against nine tobacco companies, filed in September, alleges that tobacco executives engaged in fraud and racketeering by conspiring for 45 years to conceal the risks of smoking. The suit seeks damages worth potentially hundreds of billions of dollars and a court order barring the industry from making misleading claims. The industry argues that the lawsuit ignores the marketing restrictions and other sanctions it agreed to as part of its 25-year, $ 206 billion settlement with 46 states in November 1998. It argues that the government has no explicit legal statute to recover Medicare costs. It also says cigarette warning labels, required since 1966, show that tobacco's health risks have long been known. Kessler, known to be hard-working and conscientious, is a stickler for courtroom rules. She hasn't been known to go especially fast on some cases. Aware of, but not daunted by, the federal case's significance, she seems determined to meet her own timetable. "One way or another, we're going to keep this case on track," she told the lawyers at a November hearing. "The massive nature of this case is not going to be an excuse for any lawyers (or for) any delay. . . . There's not going to be any lollygagging." (USA Today, June 2, 2000) W.R. GRACE: Agrees to Settle MD Plant Workplace Sexual Harassment Suit ---------------------------------------------------------------------- W. R. Grace & Company said on June 1 that it would pay $850,000 to settle a lawsuit in which the United States Equal Employment Opportunity Commission charged managers at a Maryland food-processing plant with egregious sexual harassment of 22 female workers from Central America. The commission said four plant managers and two nonsupervisors had engaged in systemic harassment that included exposing themselves, demanding oral sex and touching workers' breasts, buttocks and genital areas. Commission officials said that the harassment had lasted four years and that there had been one case of rape. "This stuff was pretty bad, and it seemed to be pervasive, all over this large plant," said Regina Andrew, one of the lawyers at the commission's Baltimore office who handled what became a class-action lawsuit. "This was one of the worst sexual harassment cases we've seen." The commission said numerous women at the plant in Laurel, Md., were given menial or difficult work assignments after they rejected the managers' sexual demands. Commission officials said that two pregnant women who rebuffed advances were subsequently fired and that managers would often drive female workers home late at night, after the buses had stopped running and would then expose themselves or pressure the women for sex. "This case sends a clear message that wholesale violations of the civil rights of the most vulnerable work force -- immigrant women in low-wage jobs -- will not be tolerated," said Ida L. Castro, chairwoman of the commission. In a news release, Grace noted that it sold the plant in March 1996, a month before four workers first complained to the commission. The company said none of the accusations involved any member of Grace's management or any current employee. "We are settling this case because we think it is in the best interests of our employees and our shareholders to put this matter behind us," the company said. "Grace has in place a very strong policy prohibiting sexual harassment." In March 1996, Grace, which is based in Columbia, Md., sold the plant to Townsends Inc., which operated the plant until it was closed in April. The plant made a wide variety of processed foods including soup, cheesecake and poultry dishes. As part of the settlement, Townsends, which is based in Wilmington, Del., agreed to pay $150,000. Barry Willoughby, a lawyer for Townsends, said that even though the harassment was before Townsends bought the plant, Townsends dismissed two managers and demoted two other workers after investigating the matter. He said Townsends also posted sexual harassment notices in English and Spanish. Mr. Willoughby said Townsends agreed to pay 15 percent of the overall liability. Commission officials said that after the first four women lodged a complaint in April 1996 investigators found that the problem was far more widespread, prompting the commission to bring the case as a class-action lawsuit. (The New York Times, June 2, 2000) ********* S U B S C R I P T I O N I N F O R M A T I O N Class Action Reporter is a daily newsletter, co-published by Bankruptcy Creditors' Service, Inc., Princeton, NJ, and Beard Group, Inc., Washington, DC. Theresa Cheuk, Managing Editor. Copyright 1999. All rights reserved. ISSN 1525-2272. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The CAR subscription rate is $575 for six months delivered via e-mail. 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